Mumbai: India’s leading luggage maker VIP Industries is set for a management change as the promoter group led by Dilip Piramal and family has announced its intent to sell a 32% stake in the company to Multiples’ Private Equity-led consortium. The announcement, which also included a 26% open offer for its shareholders, was made late on Sunday, 13th July.
The 32% stake will be acquired for Rs.1,763 cr at Rs.388 per share, a 15% discount to VIP Industries’ last closing price on Friday,11th July. The open offer for the additional 26% will be worth Rs.1,437 crore, giving the Multiples’ PE-led consortium a 58% stake in the company.
After the deal, Dilip Piramal will be left with 19.73% stake, along with the right to nominate one person to the board. Dilip Piramal will continue as the chairman emeritus of the company.
This sale marks the end of the efforts by Dilip Piramal to exit the business. Last year, the company was in advanced talks with global PE firm Advent International to sell a controlling stake, but the deal fell through due to various reasons.
VIP Industries was the first company to launch a dedicated brand for luggage in India, where it enjoys a 44% market share. Since its inception in 1971, VIP Industries has risen to become Asia’s largest luggage brand, growing organically and inorganically with its brands like Aristocrat, Caprese and Skybags.
The company has a market cap of Rs.6,481.78 crore, with a revenue of Rs.2,169.66 crore in FY25.
The company is increasingly having to deal with intense competition from new-age brands like Mokobara, Assembly and Uppercase in the Rs.15,000 crore luggage industry, which is seeing a spurt of growth due to an expanding travel infrastructure, online bookings and a surge in travel demand from Indians. The new owners will have to figure out a way to maintain their dominance in the industry, where new age brands are doing all they can to chip away VIP’s market share in the highly lucrative travel industry.
On the commencement of trading on 14th July, the shares of the company are already down by 4% due to the announcement.
